The Lending Scene in 2024 and What Bridging Trends Could Be on Their Way in 2025?

Property investors faced a dramatic year in 2024, especially where the second half was concerned. We had a general election in July, in which Labour won with a sizeable majority[1], coming to power for the first time in nearly 15 years. Following this, the market then had to deal with a dramatic autumn budget and its fallout.

There were numerous challenges this year. But, the economy and property market showed signs of resilience. Inflation pushed downwards in 2024, and is currently sitting at 2.3% – a fraction off our 2% target[2]. This momentum finally allowed the Bank of England (BoE) to cut the base rate, which was lowered to 4.75% later in the year[3].

Also, house prices proved resilient, no matter how many people expected the worst. At the beginning of the year, the average UK property price was £278,166 according to land registry data[4]. The latest data has the average price at £291,828.

The mortgage market embraced caution this year, despite signs of optimism in the economy. In the earlier months, mortgage rates were on the rise[5], and even as the BoE started cutting the base rate, high street lenders went in the opposite direction[6]. Thankfully though, we’re now starting to see a reversal here as we move into 2025[7].

While mainstream lenders appeared hesitant throughout much of 2024, buyers and borrowers seemed much more optimistic. There were undoubtedly many challenges to overcome this year, many of which will likely push into 2025. But, overall, participants haven’t been completely scared off from the market.

As the base rate started to come down, buyer interest rose. Brokers reported a rise in mortgage enquiries[8] following August’s cut, and mortgage approvals started consistently rising from July[9]. The impact of the budget didn’t seem to throw off as many investors as many thought it would either, with 84% of landlords revealing they’d be staying in the PRS after the budget announcements[10].

Looking ahead, hopefully, much of this optimism should continue into next year[11]. This bodes well for bridging trends in the specialist market which, unlike others in the lending scene, had a solid year in 2024.

Bridging trends in 2024: specialist lending was there for struggling borrowers

Specialist lending continued to be there for property investors in 2024. This isn’t entirely surprising. Whenever the mainstream market struggles, bridging is often there to offer support to borrowers and investors.

And 2024 seemed to be a typical year for this. Bridging loan books just wouldn’t stop growing, reaching new record highs quarter after quarter. In the opening months of 2024, loan books across the industry rose by 6.8%, totalling £8.1bn[12]. In Q2, they rose further to just under £8.4bn, and then hit £9.01bn[13] by Q3 – the first time loan books ever exceeded £9bn.

There was plenty of demand for bridging products throughout 2024[14]. Which is unsurprising given how much uncertainty lingered on the high street.

Broadly, mainstream mortgage applications and approvals did start to rebound in the final few months of 2024. But in both the first[15] and second half[16] of the year, high street lenders continually pulled mortgage products from the shelves.

Likely as a result of these challenges, the number of specialist lending cases rose this year. Given what could be on the horizon, this may lead to another busy year for the specialist lending industry.

Property and bridging trends in 2025

House prices are set to bounce back in a major way next year. Halifax[17], Rightmove[18], Zoopla[19], Hamptons[20], and (likely) more all expect house prices to rise in 2025. Also, so long as we keep inflation under control, we can expect four base rate cuts next year, according to BoE governor Andrew Bailey[21].

This could push demand for property investment. In fact, 73% of Savills researchers around the world expect stronger real estate investment activity in 2025, with the UK’s commercial market specifically holding opportunities for investors[22].

But, given how mainstream lenders have acted in the past, there may not be enough capacity or willingness on the high street to accommodate a rise in demand. As such, borrowers may seek alternative sources to get their investment plans off the ground.

2025 Outlook for Market Financial Solutions

With renewed institutional funding lines behind us, coupled with access to an expanding list of lender panels, we’re confident that we’ll be able to support brokers and their borrowers over the coming months.

What’s more, with new products at the ready, we’ll be to offer a way forward for an increasing range of property investors and scenarios.

At Market Financial Solutions, we’re primed to help brokers seeking out specialist finance. No matter what bridging trends emerge in 2025, we’ll adapt to the needs of market.

Our spectrum of bridging products can help with all manner of property investment strategies. Which includes straightforward residential purchases, through to complicated refinancing plans. Every application will still be assessed on a case-by-case basis in 2025. Providing optionality for those with poor credit histories, complex corporate setups, or CCJs on their records.

Our BTL mortgages are also available to new and experienced landlords alike. Also, outside of our financial products, we have numerous, free resources at the ready to support our clients.

Our calculators can help investors budget effectively and plan out their strategies. We’ll continue to produce blogs, guides, reports, and more to help readers keep up with the latest bespoke trends and property news.

Should any of our clients still have questions after all this, our team will be ready to provide as much clarity as possible within 4 hours of receiving a query. We expect the next 12 months to be busy. But we’re more than ready to deal with that, and push the market to new heights.